In Silicon Valley, the new year began as the last year ended — tens of thousands of tech workers lost their jobs. A few days into 2023, Amazon CEO Andrew Jassy announce There will be 18,000 layoffs across the company. Within weeks, Microsoft revealed that it was backing off Its head count is 10,000 Google said it was Termination of 12,000 employees. IBM is looking to be next, with Nearly 4,000 workers on the chopping block.
It comes on the heels of the bloodbath of 2022, when tens of thousands of jobs were lost at Meta Platforms, Twitter and Salesforce. to me Industry layoffs trackerThe technology sector has cut about 220,000 jobs since the beginning of last year. If laid-off tech workers formed a city, it would be one of the most populous in the United States, and larger than Des Moines Or Salt Lake City.
The question is: why have so many of the most profitable companies of our generation—most of them still very profitable—announced dizzying rounds of layoffs, one after another? And why now?
joint abstinence from Analysts And correspondents Is that companies are “tightening their belts” after the exorbitant waves of pandemic hiring, in order to streamline operations. Executives overseeing the cuts, for their part, pointed to adverse economic conditions. “We have employed a different economic reality than the one we face today,” said Sundar Pichai, CEO of Google. Discharge announcement. “Amazon has navigated difficult and uncertain economies in the past, and we will continue to do so,” Jassy writes. Satya Nadella from Microsoft Notice that “Some parts of the world are in a recession and other parts are anticipating a recession.”
No recession has yet hit the US or its technology sector. Inflation hurts, but the US economy It added hundreds of thousands of jobs Last month. Still, some contributors They’ve been vocal about wanting to see their heads cut off — and cut back even more.
to that end, critics argue That simple greed is driving the layoffs. They point to the tens of billions in share buybacks that tech companies authorized last year. Liz Lobato is on edge Talk to industry analysts Who said tech companies evaluate their bottom line differently, and concluded that they lay off workers mostly because others do, even though they lay off workers more often cost funds of a particular company. The fact that all of these layoffs are happening in such rapid succession gives companies some coverage — making them seem essential and inevitable.
So what is really going on here? The answer may actually be very simple.
“Controlling labor costs through periodic layoffs is like breathing in Silicon Valley: periodic, essential to life,” Malcolm Harris, author of the forthcoming bookPalo Alto: A History of California, Capitalism, and the World,” tell me. Layoffs, Harris says, “have little to do with long-term or even medium-term strategy except in terms of cultivating an insecure workforce”.
That aligns with the economic realities we face today, as the chief technology officer might put it. Because while the recession hasn’t arrived yet in any meaningful form, there is he Another economic indicator indicating willingness to lay off workers from a large employer’s perspective: A growing effort to organize tech workers in Unusually narrow job market.
Technology staff salaries jump over the during the past two yearsTheir negotiating power has begun to grow, too. Over the past half-decade, tech industry insiders have moved for changes that executives find increasingly uncomfortable.
At Google, they spoke out against gender inequality and Pressure the company to drop a lucrative defense contract. At Amazon and Microsoft, they protested lackluster climate policies and pushed those companies to make pledges to reduce carbon emissions. On Facebook and Twitter, workers rallied against content moderation decisions about keeping former President Trump on the platform after January 6, 2021. A subset of Google employees formed the Alphabet Workers Union with the Communications Workers of America union, Amazons founded Amazon Employees for Climate Justice, And at Microsoft, employees of video game subsidiary ZeniMax formed the first certified association ever recognized by the company.
The tangible gains made by regulating tech workers so far may be relatively small, but rising salaries and growing organizational capacity threaten the tech giants’ bottom line and the brand of executive sovereignty prized in Silicon Valley. Elon Musk’s mass Twitter firing last year, and his public demand that “hardcore” programmers dedicated to his software remain at the company, is useful here, not least because other tech execs have He said his approach was inspiring When choosing jobs in their own company.
Workers in an industry that has long had a reputation for union neutrality at best were forming bonds, organizing and developing solidarity. Layoffs of this magnitude and so suddenly can be a blow to the process.
Affected tech workers told me they were struck by the randomness of the shootings; Seniors in good standing, brilliant colleagues with stellar performance reviews, all showed the door, with little rhyme or reason. Many seemed to wonder why they were saved while their peers were not.
Her layoff this month was a “huge surprise,” Alejandra Petit, director of technical programs at Alphabet subsidiary Verily, told me. For one thing, she identified herself as being in good standing in the company. “I was a high performer, considered a pillar of the local community in my Boulder, Colorado office. Now I’m not even allowed back in, not even as a visitor.” Beatty was also struck by the number of quitters who were performing jobs critical to keeping Essential Products running.
If there is one thing the expulsion of people on a large scale and seemingly indiscriminate way achieves, it is that it instills a sense of vulnerability, even fear, in those who remain.
“It’s absolutely devastating, both for the people who were laid off and their families, and colleagues, who felt, that day, and will feel it for a long time after, that they’re in danger,” said Skylar Hinnant, lead quality assurance tester for Microsoft’s ZeniMax branch. “.
Hinnant said he knows a lot of people who’ve lost their jobs via Microsoft — everyone knows that. “You can be the most important engineer at your job, you can be a great programmer, at the end of the day if the algorithm wants to go.
“I think it awakens people to some truths about what the industry really looks like. We are workers. Even though we have advantages and we’re highly trained – we’re still workers. We can still arbitrarily lose our jobs just like everyone else.”
Beatty has been a prominent member of the AWU, advocating in media interviews for reproductive rights in the workplace. She was always civil and constructive, she says, and she felt her suggestions were well received by management. Now she often thinks about whether it was vengeful to end her relationship. In the end, I decided the layoffs were too big, too automated to target directly. “I guess I was another digit in whatever crazy algorithm the consulting firm used to figure out the cuts,” she said.
Elsewhere, there are signs of reversing the hard-won progress of tech workers. Bloomberg reported that at companies like Twitter, Meta, Amazon, and Redfin that have promised to improve employee diversity, layoffs have eliminated departments responsible for diversity, equality, and inclusion, or DEI initiatives.
On Tuesday, workers for Cognizant, a major contractor for Alphabet and YouTube, said: File a complaint With the National Labor Relations Board who were retaliated against for announcing their decision to join the AWU. They say Alphabet changed its policy to make moving to Austin, Texas, mandatory for all workers, and failure to comply will result in “voluntary termination.” Workers say this is against NLRB rules, which state that no major policy can be changed once regulation is announced.
The tech industry has certainly shown that it will go to great lengths to reduce workers’ wages and power. In 2015, Apple, Google and other technology companies He agreed to pay $415– A million settlement After a lawsuit alleged that companies colluded to keep wages low with a “no poaching” agreement between CEOs.
But the massive cutbacks ripping through departments today need not be retaliatory to register a debilitating and destabilizing effect, to help tech giants consolidate control over their workforces and emphasize their fragility.
“Nice companies and all the perks,” said Beatty, “none of them are really useful if you’re constantly worrying, ‘Well, am I going to be the next to be arbitrarily given away?’” “”
The clinical rigors with which layoffs have been carried out often help underscore this point — Google employees show up for work only to discover their keycards have been deactivated, workers have been locked out of email accounts and are never allowed into offices again, not even To say goodbye to colleagues who have worked with them for years.
The tech sector appears to be betting that massive, algorithmically-coordinated firefights will not only drive down labor costs, but also remind increasingly empowered tech workers of their own insecurities, and the power corporations still wield. It’s a bet that paid off historically and helped turn tech giants into some of the most profitable companies in history.
But there is a possibility that things will be different this time.
“It’s very exciting,” said Beatty. The Alphabet Workers Union held a meeting shortly after the layoffs were announced. She said: “Over 1,000 people joined, and another 800 tried to sign up for it after it started. It was big enough that we broke Zoom, and we couldn’t do breakout rooms.”
Hinnant, ZeniMax’s quality assurance tester, is also an organizer in Microsoft’s newly recognized consortium. “I think it kindled a fire with a lot of people thinking about organizing,” he says. “I have friends at Microsoft, Google, and across the industry and I’ve got… Much of calls. “
And unlike the mass layoffs of the past, there is now a foundation of organized workers in place, even if it is emerging, with the ability to provide Salt Lake City’s population of displaced workers with some resources and support.
Beatty says one of the first things the AWU did was create a Slack channel and Discord server where laid-off workers could connect, communicate, exchange information, and lead work.
“It was very helpful to have a place to go and talk to other people who were affected,” Beatty said. “And then we had people who weren’t laid off who joined in to support them, to say goodbye.”
And soon, thousands of laid-off workers were joining the channel, not just from Google, but from Meta, and across the industry. “This has been a huge help in understanding the terminology, what you can and can’t do, and in this place where people are like, ‘Oh, I’m panicking, talk about it,’” she said. “It might become a networking space — we allow some recruiters by entering. They all need work now, you know.”
Workers provided informal, ad hoc counseling services and helped those who could no longer access their email, computers, or HR contacts get information and answers. “When you’re struggling with what just happened, it’s good to have people who can help you with that,” said Beatty. “There are people on visas or parental leave who say, ‘How do I navigate this now?’” I was putting together some of these questions to pass on, and someone who was here on a visa said, “Can you ask them how long until I get deported?”
Above all, workers like Beatty and Hinnant say it is spurring interest in more regulation of tech workers. “I think this really highlights the need for people not only in the Microsoft ecosystem, but across the industry to get organized,” he says. “I think that was a wake-up call. There’s a wave coming. And there’s no stopping it.”
Betty feels the same. She is still hurt by the layoff but hopes to benefit from it. She says, “If I don’t get anything else out of this, I hope to see AWU grow exponentially. Then the sacrifice will be worth it.”
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